Singapore, despite its tiny size and reliance on just a handful of industries, has lately managed to steer clear of vicious boom and bust cycles thanks to a simple economic strategy of diversification.

The question for investors is whether the country -- trying to thrive in myriad new areas from gaming to drugs -- can continue to succeed as globalisation and fierce competition make its big bets all the more risky.

One pointer to the outcome, analysts say, is how Singapore is coping with big shifts in a sector that has gained hugely in economic importance but which now faces a more difficult future: the oil industry.

“We are at the top of the cycle,” said Sailesh Jha, an economist at Credit Suisse. “Singapore is preparing for the long-term potential of the sector by creating complementary sectors. It’s clearly diversification.”

By some estimates, the industry accounts for about 6% of the economy -- nearly double its contribution just five years earlier.

The island built up a massive, multi-billion-dollar oil refining industry to capitalise on what is today a voracious appetite for energy across the region and has seen the pay-off in four unbroken years of booming business.

Singapore’s four-decade-old refining industry now faces much more competition. National oil companies in India and the Middle East are about to take on Singapore with plans to flood the region with products from sophisticated, new refineries.

But Singapore is moving fast to foster new oil-related industries such as logistics and storage, climbing up the product value chain and making a huge effort to develop its petrochemical industry even further.

Such diversification could help insulate the island-state from a dramatic and sudden drop in demand similar to that during the Asian financial crisis of 1997/98, which forced Singapore refiners to slash operating rates.

Irvin Seah, an economist at DBS Bank, likened Singapore’s push to broaden out its oil industry to its move to diversify its manufacturing base by moving up the high-tech value chain and pushing into new products such as pharmaceuticals.

Similarly, Singapore will develop its oil industry by moving into biofuels, biodiesel, liquefied natural gas and top petrochemicals, he said.

New revenue in store

Singapore has to be flexible and nimble, analysts say.

Even resource-rich countries such as Vietnam, Malaysia and Indonesia -- some of Singapore’s best customers -- want to boost refining capacity at home, threatening to spoil the market for Singapore refiners.

“The refining business looks to be a mature and saturated industry as far as Singapore is concerned,” said Ong Eng Tong, a Singapore-based oil consultant.

So far, the diversification strategy appears to be working.

The trade-driven economy has grown by more than 6% for the past three years -- above the country’s medium-term potential -- and is expected to grow 5 to 7% this year.

Investment in the spin-off sectors is looking robust, too.

The petrochemicals sector saw Royal Dutch Shell breaking ground on a massive 800,000-tonne-per-year petrochemical complex last year. Local media reported this week that Exxon Mobil was recruiting engineers and technicians ahead of a final decision on a $4 billion petrochemical complex.

India and Kuwait announced plans this month to tie up with Singapore on a $100 million plant.

Analysts say that Singapore is ideally placed to boost its position as a base for commercial oil storage by leveraging off its existing strength as a financial and oil trading centre.

The government, which wants to more than double storage capacity in the next few years, says the oil storage business already contributes about 0.5% to the country’s GDP.

“We are in the middle of a booming global region and I think Singapore is positioning itself to take advantage of this,” said Tim Condon, an economist at ING Financial Markets. “It’s a case of ‘build it and they will come´.”

Singapore is investing S$700 million in the first phase of a massive underground rock cavern which will be ready by 2011 and companies such as Vopak, Oiltanking and Tankstore are building storage.

The government boasts that oil traders such as Hin Leong, Emirates National Oil Co. and Chemoil are also joining the rush for storage space.

There is huge potential here. Singapore is already capitalising on strong oil trade through its port. Oil re-exports, which include oil that has been “warehoused” in Singapore, rose a massive 137% last year to S$11 billion.

All of this could bode well for Singapore as it diversifies into new industries and services.

Long dependent on demand for high-tech goods, Singapore is building casinos, laboratories and universities to attract people and generate new sources of economic activity.

“Policy-wise, if you can kickstart a new growth engine before the old engine dies off, then Singapore should be OK,”

The BSE Sensex ended the session on a positive note as it closed up by 47.54 points at 14,130.95 while Nifty closed higher by 9.6 points at 4,155.20. Of the 2,581 stocks actively traded on BSE, 824 stocks advanced while 1,677 stocks declined. The BSE Mid cap and Small cap closed lower by 45.08 points and 91.13 points at 6,084.40 and 7,228.88 respectively.

Angel Broking recommends a “Buy” on Tanla Solutions at a price of Rs 405 with a 12-month target price of Rs 605 per share, an upside of 49 per cent. At Rs 405, the stock is valued at 9.4 times its estimated FY09 earnings. Tanla Solutions is a telecom software company operating in niche businesses of aggregation, telecom products and provides offshore support to its clients.

All the three businesses have high margins ranging between 35-90 per cent and enables Tanla to offer end-to-end telecom solutions. In the aggregation business, the company has strong business ties with global operators such as Vodafone, O2, T-Mobile, Virgin, Orange and 3 (Hutchison). The company now plans to expand its geographic presence by entering markets such as Ireland and the US.

Gujarat State PetronetAnand Rathi recommends a “Buy” on Gujrat State Petronet at a price of Rs 54, with a target price of Rs 75, an upside of 39 per cent. The stock is valued at 22 times its estimated FY08 earnings.

The company recently announced its FY07 results, which have been in line with the estimates of Anand Rathi. The company earns high operating margin, at over 80 per cent, and is expected to maintain the current levels of profitability over FY08, while margins are expected to improve to 83.1 per cent for FY09.

LupinASK Securities recommends a “Buy” on Lupin at a price of Rs 725, with a target price of Rs 807, an upside of over 11 per cent. The stock is valued at 14.7 times its estimated FY09 earnings. Lupin has been going through a major change in its business model over the last few years driven by shift from active pharmaceutical ingredients (APIs) to formulations, and unregulated markets to regulated markets.

Apart from its geographical and vertical shift, product baskets with stronger intellectual property rights (IPRs) for ceftriaxone, cefdinir and perindopril have also been expanding. Lupin's new chemical entity (NCE) pipeline is also maturing with likely licensing of one of the lead candidates over the next 12-15 months. Thus, with a de-risked business model the company is expected to achieve sustained profitable growth over a long term.

Jagran PrakashanMan Financial recommends a “Buy” on Jagran Prakashan at Rs 470, with a target price of Rs 543, denoting an upside potential of 16 per cent. At Rs 543, the stock is valued at 22.2 times its estimated FY09 earnings, which is at a 10 per cent discount to a national player like HT Media.

The company has increased its ad rates by 26 per cent effective from April 2007. Man Financial expects a 26.5 per cent CAGR in advertisements over FY07-FY09.

The company also added two new verticals, namely, outdoor advertisement and event management, which have started to add to its bottomline right from the first year of operation. Given the strong growth in advertisement, and reduction in newsprint prices, its operating margin is expected to increase significantly, from 19.6 per cent in FY07 to 23.3 per cent in FY08.

Lakshmi Machine WorksEmkay Share recommends a “Buy” on Lakshmi Machine Works at a price Rs 2,743 per share with a target price of Rs 3,510, an upside of 28 per cent. At Rs 2743, the stock is valued at 15 times its estimated FY08 earnings.

The company’s net sales in Q4FY07 grew 48 per cent y-o-y to Rs 582.1 crore led by a strong growth in the textile machinery division. The EBITDA margin increased by 220 bps y-o-y to 20.8 per cent mainly on account of an increase in realisations due to VAT implementation in Tamil Nadu. Net profit for the quarter declined by 21 per cent to Rs 68.6 crore due to the write-back of tax provision in the same quarter last year.

Euro CeramicsNetworth Stock Broking recommends a ‘Buy’ on Euro Ceramics at a price of Rs 146 with the target price of Rs 230 per share, an upside of 57 per cent. At Rs 230, the stock trades at 5.11 times and 4.06 times its consolidated FY08 and FY09 estimated earnings.

The company’s calcareous tile unit, targeted at the upper segment of the market, having an annual capacity of 45,000 tonne will go on-stream by July 2007. Its sanitary ware unit having a capacity of 11,000 tonne p.a. is expected to go on-stream in October 2007. Post expansion, the product portfolio of Euro will be fortified with higher margin products.

Terming 13.6% industrial growth in April as a good start for the year, Finance Minister P Chidambaram today said the government did not intend to curb demand except in overheated sectors such as housing and real estate.

"The intention is to constrain demand in those sectors where there are signs of what you call overheating. An example of which could be real estate and housing," Chidambaram said.

The country's industrial production rose 13.6% in April this year from 9.9% in the same month last year. While manufacturing recorded a robust 15.1% growth, mining grew by 3.4%.

On the impact of RBI's measures to tighten money supply in these sectors, he said these steps work with a time lag and it might take time to have their impact on the intended sectors.

In other sectors, however, there is no intention to reduce demand, Chidambaram said.

The government is also worried of a slowdown in some sectors such as textiles in view of the strengthening of rupee against the dollar.

The market opened marginally up at 14122, tracking mixed global cues. It was quite sluggish opening with low volumes and thin market breadth. As the trading progressed the Sensex lost its momentum and gave up its early gains on across-the-board selling. The sustained selling in heavyweights, auto and consumer durable stocks dragged the Sensex to the day's low of 13947 by afternoon. The Sensex witnessed some movement in the second half of the trading session. The buying at lower levels in select Sensex stocks helped the index to recover some losses and enter into positive territory. Cement stocks, ACC and Gujarat Ambuja Cement witnessed buying action as the data from the Cement Manufacturers' Association showed an increase of sales by 10.6% to 1,421 million tonne in May. The market rallied sharply towards the close as gains in metal, oil & gas and banking stocks propelled the index to an intra-day high of 14153. The Sensex finally wrapped up the session with gains of 48 points at 14131 and the Nifty closed the session by adding nine points at 4155.

Surprisingly the market breadth was weak, with the losers outnumbering the gainers in the ratio of 2.03:1. Of the 2,581 stocks traded on the BSE 1,678 stocks declined, 823 stocks advanced and 80 stocks ended unchanged. Except the BSE Oil & Gas index, the BSE Metal index and the BSE Bankex most of the sectoral indices ended in negative territory. The BSE Auto index dropped 1.23% followed by the BSE CD index (down 0.96%), the BSE Teck index (down 0.80%) and the BSE IT index (down 0.79%).

Among the Sensex stocks, cement stocks logged significant gains. ACC led the surge and vaulted by 5.56% at Rs807, while Grasim soared 2.06% at Rs2395 and Gujarat Ambuja Cement advanced by 0.78% at Rs110. Among the other major gainers Tata Steel scaled up by 4.03% at Rs603, ICICI Bank shot up by 1.90% at Rs919, Reliance Industries vaulted by 1.88% at Rs1,670 and HDFC jumped 1.16% at Rs1,781. Hero Honda, L&T and HLL gained marginally.

Oil stocks were in the limelight. Jindal Drilling & Industries scaled up by 2.85% at Rs666, Castrol surged 2.47% at Rs272, BPCL added 2.40% at Rs346 and HPCL edged higher by 1.17% at Rs277.

The benchmark index, BSE 30-share Sensex, posted modest gains for the second straight day, amid high degree of volatility. Sensex, which had slipped below the psychological 14,000 level in mid-afternoon trade, regained that level in late trade as value buying emerged at lower level. Shares from oil & gas, metal and cement saw buying interest while those of auto and IT were offloaded.

Sensex rose 47.54 points or 0.34% at 14,130.95. It opened higher at 14,122.33 but started declining as fresh selling emerged at every rise till it touched a low a 13,946.99 in mid-afternoon trade. From here it again started rising to strike an intra-day high of 14,153.44 level, as strong buying emerged in late trade The Sensex oscillated 205 odd points in the day.

The S&P CNX Nifty rose 9.60 points or 0.23% at 4,155.2.

Earlier, the market started weakening since afternoon trade after the industrial production data was released in early afternoon trade. India’s industrial production was up 13.6% per annum in April 2007 compared with 9.9% growth in April 2006. Manufacturing output climbed 15.1% in April 2007 against 11% in April 2006. Industrial output growth of March 2007 has been revised upwards at 14.5%.

The strong industrial production growth indicates that further tightening of monetary policy by RBI may be on cards, belying expectation that the interest-rate cycle had peaked.

The Nifty June 2007 futures settled at 4,153.20 compared to the spot closing of 4,155.20. Today's discount was 2 points of Nifty futures over spot price was lower than a discount of 12.90 points on 11 June, indicating that some short covering might have happened today

The total turnover on BSE amounted to Rs 3,820.90 crore, while the NSE futures & options segment turnover was Rs 37,614.56 crore.

The broad market depicted weakness. The market breadth was weak on BSE, with 1,693 shares declining compared with 858 that advanced. 86 remained unchanged. There were around 2 losers for every gainer.

The BSE Mid-Cap index declined 0.74% to 6,084.40 while the BSE Small-Cap Index lost 1.24% to 7,228.88

Battered cement stocks made a strong comeback today, on fresh buying after the Cement Manufacturers' Association indicated sales rose 10.6% to 14.21 million tonnes in May 2007. Cement major ACC surged 5.30% to Rs 805 on 5.10 lakh shares and was the top gainer among Sensex constituents. ACC reported a 19% increase in sales in May 2007, more than three times the pace of growth recorded in the previous month, indicating strong demand for cement from homes and other construction projects.

Tata Steel advanced 4.03% to Rs 603.10 after an announcement made by Corus today, 12 June 2007, that it will hike UK wire rod prices by at least 7%. The scrip was also bolstered by block deal, which took place in early trades on NSE - around 4.92 lakh shares changed hands on NSE at Rs 587.80 each. Other metals stocks, Steel Authority of India (Sail) (up 3.82% to Rs 131.75) and Jindal Stainless (up 3.30% to Rs 147.20) also gained. The BSE Metal Index was up 0.99% to 10,359.92.

Index heavyweight Reliance Industries (RIL) advanced 2.45% to Rs 1,709, on 10.49 lakh shares. It had surged to a high of Rs 1711, while its low was Rs 1662. The stocks surged on reports it is looking at buying stake in refineries in US and Middle East. Led by RIL and refinery stocks, the BSE Oil and Gas index rose 1.04% to 7,490.71, and it was the top gainer among the sectoral indices on BSE.

HPCL (up 1.30% to Rs 277.30) and BPCL (up 2.32% to Rs 346) rose after reports that the centre is likely to review retail prices of petrol and diesel in mid-July 2007 to bring them in line with the recent rise in global oil prices. Oil refining and marketing companies suffer losses as they have to bear the burden of under-recovery, which is the difference between the actual controlled selling price and the desirable selling price.

ICICI Bank rose 2.12% to Rs 921 after the bank informed that its consolidated profit after tax under Indian GAAP was Rs 2,760 crore (US$ 640 million) for the year ended March 2007 (FY 2007). As per the reconciliation statement between Indian GAAP and US GAAP, the net income (profit after tax) under US GAAP was Rs 3,127 crore ($726 million) in FY 2007, compared to Rs 2,004 crore ($465 million) in the previous year.

Among the other heavyweights, State Bank of India (SBI) was down 0.28% to Rs 1336, while ONGC lost 0.12% at Rs 860.

Larsen & Toubro rose 0.90% to Rs 1,907 on bagging orders from Oil & Natural Gas Corporation (ONGC) and Steel Authority of India (SAIL). ONGC awarded a Rs 877-crore turnkey project for the NQ Re-construction (NQRC) Project in Mumbai high north fields. This project is the largest brownfield project of its kind awarded in the offshore oil & gas sector in India. L&T said the project will be executed on a lumpsum turnkey basis with the completion scheduled by 8 May 2009.

L&T also announced today that the engineering, procurement and construction and contracts division of the company had secured a Rs 114.43-crore order from SAIL for the turnkey construction of 220/132- kilo vatt gas insulated substation and associated transmission network for its Bhilai steel plant in Chattisgarh.

Hindustan Unilever rose 0.61% to Rs 189.50 after 10 lakh shares changed hands in a single block deal on NSE at Rs 190 each in the counter. The block deal took place in early trade.

IT pivotals declined after a rally in the past few sessions that was triggered by weakening of the rupee against the dollar. The renewed selling in IT stocks today followed firming up of the rupee. The BSE IT Index was down 0.8% to 4,975.50

In early trade, the rupee was at 40.7600/7700 per dollar, moving up from 40.79/80 on 11 June 2007, and heading back towards a recent nine-year peak of 40.28. The rupee's rise was attributed to increased foreign fund inflow to subscribe to the mega IPO of DLF, a real-estate developer. The issue opened on Monday, 11 June 2007 and will close on Thursday, 14 June 2007.

Dr Reddy’s lost 2.50% to Rs 609.60 while NTPC lost 1.35% to Rs 152.90.

Auto pivotals declined on fears sales may be impacted, as the centre is likely to review retail prices of petrol and diesel in mid-July 2007 to bring them in line with the recent rise in global oil prices. Tata Motors (down 1.66% to Rs 641), Maruti Udyog (down 2.20% to Rs 717.90), Bajaj Auto (down 0.32% to Rs 2112), and Mahindra & Mahindra (down 3.08% to Rs 696.50), edged lower. The BSE Auto Index shed 1.23% to 4,646.26 and was the top loser among the sectoral indices on BSE.

UTI Bank rose 4.13% to Rs 588.05 after 3 lakh shares changed hands in the counter in two block deals on BSE and NSE at Rs 580 each. The first block deal took place on NSE where 1.50 lakh shares changed hands and around 1.52 lakh shares changed hands in the second block deal on BSE. The block deal in BSE took place at 12:57 IST.

Welspun Gujarat Stahl Rohren dropped 3.54% to Rs 177.30 after six lakh shares changed hands in a single block deal at Rs 183.45 a share on BSE. The deal was struck in mid-morning trade.

Escorts jumped 3% to Rs 112.85 after the central bank allowed foreign funds to resume buying up to 49% of the company's shares through primary market and stock exchanges under the portfolio investment scheme.

Diamond Cables galloped 9.31% to Rs 166.10 on receiving Rs 75-crore orders from various distribution companies and other customers.

Shree Ashtavinayak Cine Vision jumped 5% to Rs 239.95 on reporting 89.5% growth in net profit in FY 2007 to Rs 14.16 crore as against Rs 7.47 crore in the year ended March 2006. Sales rose 59.21% to Rs 96.07 crore in FY 2007 as against Rs 60.34 crore in FY 2006.

Shipbuilder Bharati Shipyard inched up 0.60% to Rs 477 on securing a Rs 260-crore order for two anchor handling tugs for support to the offshore rigs from a Norwegian firm. The company announced the new order win during market hours Monday, 11 June 2007.

China’s Shanghai Composite reversed from early weakness and was up 1.91% to 4,072.14.

In the US markets, stocks finished a volatile session without much change on Monday, 11 June 2007, as stubbornly high bond yields discouraged investors from building fresh positions. The Dow Jones Industrial Average (DJIA) rose 0.57 point to 13,424.96, capping a day of trading that saw stocks slip, advance, and then pull back again. Broader stock indicators were narrowly mixed. The Standard & Poor's 500 index edged up 1.45 points to 1,509.12, and the Nasdaq Composite index fell 1.39 points to 2,572.15.

Oil prices dipped but held above $69 on Tuesday, 12 June 2007, as an expected rise in gasoline stockpiles in the US weighed against OPEC supply curbs and worries over Iran's nuclear dispute. London Brent crude was down 15 cents at $69.41 a barrel, after rising 87 cents on the previous day.

Over the next few days, the progress of the July-September monsoon will hold key. The weather office said in April 2007 that this year’s monsoon was likely to be 95% of the long-term average, with a 5% margin of error. The annual monsoon is vital for India’s economic health as it is the main source of water for agriculture, which generates more than a fifth of the gross domestic product.

The IPO of reality major DLF was subscribed 1.28 times by the end of second day of the issue today, 12 June 2007. The IPO had opened for subscription on Monday, 11 June 2007. It closes on Thursday, 14 June 2007.

Sell Orchid Chemicals with stop loss above Rs 252 for a target of Rs 234 and Rs 225. This is a day-trading recommendation.Sell GTL with stop loss above Rs 224.50 for a target of Rs 208, 202 and 198. This is a day-trading recommendation.

Short Sell Tata Teleservices at Rs 26.80 with stop loss at Rs 27.50. This is a day-trading recommendation.Buy Divis Lab at Rs 5100 with stop loss at Rs 5030. This is a day-trading recommendation.Buy Seshasayee Paper with stop loss of Rs 151.

The presence of a sharp intra-day volatile trend due to lack of clarity may see the market remain edgy and move on the either side of the zone. Mixed fund inflows into the domestic equities and the global market trend will be closely monitored for further direction. The Sensex swung over 180 points during intra-day trades and shed 0.14% at the close on Monday across-the-board selling pressure which may keep the investors cautious. Among the key local indices, the Nifty has good support around 4100 and upside till 4176-4182 levels. The Sensex has a likely support at 13900 and may face resistance at 14300.

US indices ended mixed Monday, giving up most of the day's gains, with investors showing reluctance amid rising Treasury yields, higher oil prices and jitters at the start of a busy week of economic news. The Dow ended marginally up at 13425 , while the tech-laden Nasdaq declined to close a point lower at 2572.

Crude oil prices in the international market edged higher, with the Nymex light crude oil for July delivery rose by $1.21 to close at $65.97 per barrel. In the commodity space, the Comex gold for August series gained $8.70 to settle at $659 a troy ounce.

The market is expected to stay rangebound, with mixed cues coming from global markets.

Asian stocks were trading on a mixed note, with Nippon Oil leading energy-share gains on a rebound in crude oil prices, while BHP Billiton and other mining shares advanced after industrial- and precious-metal prices rose. Japan's Nikkei was down 64.63 points or 0.36% at 17,769.85 and South Korea's Seoul Composite lost 0.12% at 1,714.52. Hong Kong's Hang Seng (up 0.23% at 20,662.96), Singapore's Straits Times (up 0.36% at 3,558.26) and Taiwan's Taiwan Weighted (up 0.09% at 8,346.25) gained.

In the US markets, stocks finished a volatile session without much change as stubbornly high bond yields discouraged investors from extending Wall Street's recovery from last week's steep losses. The Dow Jones Industrial Average (DJIA) rose 0.57 point to 13,424.96, capping a day of trading that saw stocks slip, advance, and then pull back again. Broader stock indicators were narrowly mixed. The Standard & Poor's 500 index rose 1.45 points to 1,509.12, and the Nasdaq Composite index fell 1.39 points to 2,572.15.

As per provisional data, FIIs were net equity sellers to the tune of Rs 26.12 crore while Domestic Institutional Investors (DIIs) were net equity buyers worth Rs 237.12 crore on 12 June 2007.

Oil prices dipped but held above $69 on 12 June 2007, as an expected rise in gasoline stockpiles in the United States weighed against OPEC supply curbs and worries over Iran's nuclear dispute. London Brent crude was down 15 cents at $69.41 a barrel, after rising 87 cents on the previous day.

Over the next few days, the progress of the July-September monsoon will hold key. The weather office said in April 2007 that this year’s monsoon was likely to be 95% of the long-term average, with a 5% margin of error. The annual monsoon is vital for India’s economic health as it is the main source of water for agriculture, which generates more than a fifth of the gross domestic product.

US markets were flat & asian mkts are trading negative . Bias for Mkts cautious, with possible support for nifty being at 4109 and possible tgt being 4162

Nifty lvls : support at 4120 /4080/4040 and resistance at 4160 /4180 /4200

News : Hexaware tech has won an 18mn$ project from Japanese systems integrator,with further scope to go up to 33mn$ for modernising technology of postal services and involves development of a core application, Patni Computer tie-up with UK company Clear Technology, Mukesh Ambani-controlled Reliance Industries (RIL) is bidding for the project jointly with Siemens and Gammon and Anil Ambani-controlled Reliance Energy, which has bagged the contract for the Metro phase one, has joined hands with Canadian firm SNC Lavalin for the second stretch.,Centre to review petrol, diesel prices in July, L&T Infotech to spend Rs 600cr on expansion, Gayatri Projects bags order worth Rs 140 cr

The total open interest in the market is 62,639 crore and added around 829 crore in open interest.

Whatever the struggle, continue the climb. It may be only one step to the summit.

The bulls appear to be struggling at the moment, not just in India but across the world. We expect a soft opening today on the back of some weakness in the Asian markets and a flat finish on Wall Street. Crude oil too is hovering above the $65 per barrel mark. The market will remain volatile, with alternate bouts of buying and selling. One should stick to a stock specific strategy to avoid a bigger hit in one's portfolio.

FII inflows seem to have dried up over the past couple of weeks after the April-May euphoria. Ever since the Nifty made a new lifetime peak, the market has lost its momentum. The underlying sentiment has weakened slightly mainly due to global concerns and lack of fresh local catalysts. The immediate trigger would be the progress of monsoon. The next trigger could come from the first-quarter earnings, which will start trickling in from the second week of next month. Before that, we have the industrial production data coming in today.

A sharply lower reading on this front could signal a slowdown in the economy and therefore in earnings growth. One positive to emerge from this could be that inflation may cool off. As a result, there will be less pressure on the RBI to hike rates. Still, the central bank governor has made it a habit to surprise the markets, and one never knows what he has in store for us.

The latest data from China shows that inflation accelerated last month, increasing the possibility of higher interest rates. There is also a possibility that Bank of Japan may hike its key rate in the next few months after the world's second-largest economy expanded at a faster pace than earlier anticipated in the first quarter. Last week's comments from Federal Reserve Chairman Ben Bernanke hinted that interest rates in the US will at best remain unchanged this year. Some are even betting that rates in the US could even head higher next year if the economy there picks up pace as predicted by Mr. Bernanke himself. Central Banks in the UK and Europe too are eager to keep the threat of inflation at bay.

FIIs were net sellers to the tune of Rs261.2mn (provisional) in the cash segment yesterday while the local institutions pumped in Rs2.37bn. In the F&O segment, foreign funds net buyers of Rsbn yesterday. FIIs pulled out Rs9.36bn from the cash market on Friday. Mutual Funds were net buyers of Rs2.27bn on the same day.

US stocks ended flat, giving up most of the day's gains, with investors showing reluctance amid rising Treasury yields and higher oil prices. Energy and financial shares rallied on prospects for higher earnings.

After the close of trade, Texas Instruments narrowed its second quarter revenue forecast to a level that could miss analysts' estimates. The chipmaker also narrowed its earnings forecast to a level that is in line with analysts' estimates. Shares fell 2% in extended-hours trading.

US bond yields fell an earlier advance and have retreated 0.10 percentage point from their high last week. Treasury prices slipped, raising the yield on the benchmark 10-year note to 5.15% from 5.1% late on Friday.

In currency trading, the dollar rose modestly versus the euro and the yen. COMEX gold for August delivery rose $8.70 to settle at $659 an ounce.

US light crude oil for July delivery advanced $1.17 to settle at $65.93 a barrel on the New York Mercantile Exchange. The front-month contract was quoting 17 cents lower at $65.80 a barrel in extended trading.

European stocks advanced. The pan-European Dow Jones Stoxx 600 index added 0.8% to 388.01. The German DAX Xetra 30 closed up 1.5% at 7,706.10, the French CAC-40 rose 1% to 5,940.09 and the UK's FTSE 100 added 1% to 6,567.50.

In the emerging markets, the Ibovespa in Brazil rose 0.85% to 52,776 while the IPC index in Mexico was up 1.2% at 31,833 and the RTS index in Russia advanced 0.5% to 1798.

Asian stocks are mixed this morning. But,materials and energy shares rose after the price of metals and crude oil rebounded. BHP Billiton climbed to a record, leading advances on the Morgan Stanley Capital International Asia-Pacific Index.

The MSCI index added 0.2% to 151.01 as of 10:15 a.m. in Tokyo, extending yesterday's 0.2% advance. Benchmarks rose in markets open for trading around the region, except in Japan and Malaysia.

The Nikkei 225 Stock Average slipped 0.2% to 17,792.29, after earlier rising as much as 0.2%.

A measure of six metals traded on the London Metal Exchange gained 2.2% yesterday, rebounding from a four-day 6.7% slide. Copper climbed 3.1%, while zinc rose 3.3%.

Markets witnessed flat close however managed to end in positive terrain. Select, IT, Pharma and FMCG aided some support as Banking and Consumer Durable were the major draggers. Even the Mid-Cap and the small cap came under selling pressure. Grasim, ONGC and SBI were among the major losers, however GAIL, Tata Power and VSNL were the major gainers among the 50scrip’s of NSE Nifty. Finally, the 30-share Sensex added 19 points to close at 14083. NSE-50 Nifty was flat at 4145.

Satyam Computer gained 1% to Rs497 after the company partners with JDA Software group. The scrip touched intra-day high of Rs513 and a low of Rs492 and recorded volumes of over 49,00,000 shares on NSE.

Bharti shipyard gained by 1.7% to Rs475 after the company announced that they have secured order worth $65.1mn from Norwegian offshore. The scrip touched intra-day high of Rs486 and a low of Rs467 and recorded volumes of over 50,000 shares on NSE.

RPG Life Sciences spurred by over 5% to Rs105 after the company announced its plans to separate its Pharma Biz, investment. The scrip touched intra-day high of Rs112 and a low of Rs102 and recorded volumes of over 76,000 shares on NSE.

Welspun Gujarat surged nearly by 3% to Rs183 after the company secures orders worth Rs11.66bn. The scrip touched intra-day high of Rs187 and a low of Rs180 and recorded volumes of over 20,00,000 shares on BSE.

Gayatri Projects spurred by over 3% to Rs266 after the company secured order worth Rs1.4bn. The scrip touched intra-day high of Rs270 and a low of Rs259 and recorded volumes of over 1,00,000 shares on NSE.

Technology stocks pared their gains as rupee strengthens against the US Dollar. Wipro pared its gains as it slipped 1% to Rs542, Polaris was down by 3.6% to Rs162 and Moser Baer dipped by 4.3% to Rs434. However, Satyam Computer gained by 1% to Rs497, Infosys was up by 1.5% to Rs1979.

Select Auto stocks were on the receiving end. TVS Motors lost by 1% to Rs63, Maruti was down 0.6% to Rs733 and Bajaj Auto edged lower by 0.2% to Rs2115. However, Hero Honda was up 2% to Rs698, Tata Motors added 0.2% to Rs653.

Pharma stocks were in good health. Glenmark Pharma gained by 1% to Rs684 after the company announced that they would split each share into two, Ranbaxy was up by 0.6% to Rs370, Cipla was flat at Rs210, Glaxo gained by 1.2% to Rs1299.

Global growth and rising interest rates in Asia and Europe put the U.S. bond market under pressure

After a modest start for the week ignoring the China stocks sell-off, US market plunged during the mid-week trading days during the past week. But at the end, it did try to recoup back some of the week’s loss. Nevertheless, all the three indices lost 1.6% - 2% going into close at the week’s end on Friday, 8 June 2007.

Unforeseen strength in the services sector and comments from Fed Chairman Ben Bernanke about housing and the economy dashed investors' hopes for a reduction in interest rates any time soon. The rate fears coupled with rising oil and higher bond yield rattled the US market between Tuesday, 5 June and Thursday, 7 June. Yield on 10-yr note soared above psychological 5% level for the first time since August. It reached a level of 5.24% but closed the week at 5.11%.

All the three indices incurred substantial losses between Tuesday, 5 June 2007 and Thursday, 7 June 2007. DJIx itself lost 410 points between those three days. Nasdaq and S&P 500 lost 77 points and 47 points respectively. But on Friday, 8 June 2007, lower oil price and partial stabilization of bond yields powered a rally in the market and the indices closed higher for the day.

The Dow Jones Industrial Average lost 244 points for the week. Tech heavy Nasdaq lost 41 points while S&P 500 lost 29 points.

On the economic news front, mixed batch of May same-store sales came out that were impacted in part by rising gasoline prices. First quarter productivity was revised down to 1% from a previous read of 1.7%, while unit labor costs were shown to have risen a higher than expected 1.8% from the 0.6% rate initially reported.

During the week, the acquisitions news that hit the headlines were – Flextronics announced that it will acquire rival electronics manufacturer Solectron for approximately $3.6 billion. Steel stocks got a major boost on Friday after ThyssenKrupp reportedly said it is interested in U.S. Steel. Avaya also confirmed during the week that it is being taken private.

Executive Summary

For the week, DJIx is down by 1.8%, S&P 500 is down by 1.9% and Nasdaq is down by 1.6%. While the interest rate action weighed heavily on investor sentiment in the past week, the deal-making that helped fuel the recent rally in stocks continued. For the year, the Dow is up by 9.7%, Nasdaq is up by 6.6% and S&P 500 is up by 6.4%.

During the week, investors became quite worried after the European Central Bank raised its benchmark rate 25 basis points to 4%. Though the same is well below Fed’s 5.25%, it bothered traders who feared that a hike, here, is imminent.

Next week has options expirations that might push stocks in either direction as investors decide whether to leave options alone or exercise them. On the economic data front, the government will report on retail sales on Wednesday, 13 June, wholesale price inflation on 14 June and issue its monthly Consumer Price Index report on 15 June.

Promoted by Jerry Varghese, Roman Tarmat provides engineering, procurement and construction services for highways and roads, airside works and other civil work. The company has also set up a ready-mix concrete (RMC) plant at Goregaon, Mumbai, with an installed capacity of 30 cubic meters per hour to cater to its captive requirement and four automatic stone crushing units to enhance its operational efficiency.

Roman Tarmat’s IPO is to fund long-term working capital requirement and invest in capital equipment. The price band has been fixed at Rs150-Rs175. The issue opens on 12 June and closes on 19 June 2007.

Strengths

End April 2007, the order book was Rs 336.89 crore comprising un-commenced projects, unfinished and uncertified portions of commenced projects. The order book is to be executed over two years. Generally, 35% of the road projects are executed in the first year and balance 65% in the second year. The order book represents four times the reported March 2006 year ending revenue.

End March 2007, about 9,456 km of roads were yet to be awarded under the National Highways Development Programme. As Roman Tarmat is one of the players operating in the road segment, it may see further increase in order book. Apart from this. the company is also likely to benefit from increase in investment in restructuring of existing airports and setting up green field airports.

Weaknesses

Has claimed tax benefit of Rs 6.02 crore under Section 80IA in FY 2006, and Rs 6.3 crore in the nine months ended December 2006. The retrospective withdrawal of Section 80IA benefit may not only impact FY 2007 profit but also future profit until the orders bided taking into account 80 IA benefit are executed going forward. The Finance Bill 2007-08 has clarified that benefits of Section 80-IA (which provides for a ten-year tax benefit to an enterprise or an undertaking engaged in development of infrastructure facilities, Industrial Parks and Special Economic Zones) shall not be available to a person who executes a works contract. The company has also not included this benefit under ‘tax benefits available to the company’ in the prospectus.

From FY 2003 to nine months ended December 2006, there was a gradual improvement in operating profit margin (OPM), from –0.8% to 12.4%. This was on account of increase in proportion of revenue from airside works. As a percentage of contract receipts, the proportion of airside works went up from 3% to 25%. However, in the pending order book end April 2007, the proportion of airside works declined to 13%. Thus, OPM may not sustain at current levels. OPM for road projects is 8%-10% and for airside works 14%-15%.

Valuation

Roman Tarmat’s net profit was Rs 8.15 crore in the nine months ended December 2006. Annualised EPS works out to 9.9. At the offer price band of Rs 150- Rs 175, P/E comes to between 15.1 and 17.7, respectively. Comparable and bigger players in terms of revenue --- Valecha Engineering and C&C Construction ---- are currently trading at nine months’ annualised recurring earning of around 15 times.

In Part-I of CNBC-TV18's exclusive interview with trader & investor, Rakesh Jhunjhunwala, he shared his perspectives on global markets, on where the Indian markets have reached in this rally; the fact that he believes there could be a period of consolidation right now but he expects there will not be a deep correction from here on, not more than 10% as he classified.

In Part-II of the same series Jhunjhunwala told CNBC-TV18 that the investors are likely to see a range-bound market, and it is unlikely to see a major move either way. He sees consolidation and feels that the market may not move 10% plus or minus.

Regarding volatility, he feels that the market must expect corrections from time to time. However, he assured that the Sensex might never go below the 11,500 levels and the he sees the Sensex EPS at Rs 840 this year. He hopes that the US rates will come down and the domestic inflation, in India, may not go above 5%. For present, he feels that the government may have achieved its tightening target.

A: We have earned Rs 730-740 last year. The expectation in the context of what we have done in the last 4 years is not extremely high; it’s only 15-16%; but this is on a higher base.

Risks can be many - it can be demand in the software sector it could be a depreciation of the rupee; but by and large, it should come through.

Q: Do you think either technology, which is almost a fifth of the Index or autos, which have started showing some distressed signs - they could derail these earnings?

A: Autos is a very small part of the Index, really.

There could be other sectors which would compensate; some of the banks could do very well, Reliance could surprise - refining margins are at all time highs, some of the refining companies could do better; ONGC could do better.

And we cannot look only at the Index - maybe Index is around 16 - it could be 14.But if you look at the larger context of the quality of the earnings, the general growth, the potentiality - you have taken twenty years to come to USD 30 billion of a software exports; the projection is that we are going to double that in the next three years. What kind of a kicker that means for every other industry in India, whether it is for hotels or for housing or for retailing or for real estate!

How I structure my investment; rather than looking at year-to-year growth, I invest in the business model. And over that business model, do I feel the earnings have peaked, whatever investments I have made? I feel that the peak is far from here.

Also in terms of valuations, I do not think that we have had peaked valuations; we are going to have something like ’92, maybe in the next four-five years and that is where valuations are going to be.

Q: Have you taken any cash off the table; since you spoke about investing in a business and riding it till you believe it has peaked - in any of your significant investments, have you booked profits?

A: I have booked profits in all my investments. But I have reinvested that in the market, except maybe, buying a house or some small other assets. All my wealth is in equity and if I get money, I would put it back into equity.

Q: Not fixed maturity plans and stuff like that?

A: I have some Rs 40 lakhs lying in the public provident fund. Apart from that, I pay interest; I do not earn any interest.

Q: But in your top five businesses that you have - investments in stocks like Titan, Praj; you don’t believe they are anywhere close to their earnings peak yet?

A: They are surely not close to their earnings peak.

Q: Valuation peak?

A: Valuation peak, may be; but I personally feel in some of the investments, I don’t know whether Titan or Praj, earnings growth are going to really surprise on the upside and if the earnings growth is going to be extremely high, then the growth in the value of the investments - even if the valuations remain what they are, surely in some of my investments, I don’t expect the valuation or the P/Es to increase.But if the earnings growth is going to be very good and P/Es are maintained, then the appreciation can be quite good. That is at least what my hope is.

Q: You spoke about being surprised on the Budget day - the biggest nasty surprise was construction. Did you change your view at all on that sector, which you have been very bullish on after what came through on the Budget; and any of the interest rate concerns that are bounded?

A: No; effectively, you increase a dividend tax after such buoyancy in revenue - to have an increase in the dividend tax; and also the negative international factors played out a very big role just prior to the Budget day.

But those negative international cues; the expectation was that there will be a corporate tax cut. There was an effective increase in corporate taxes. I think that is what really disappointed the market.

Of course, the overall fiscal picture was very good and it has turned out to better than what he (the FM) had projected also. I was reading the Business Standard today in the morning; the growth in direct taxation in the first two months this year is 70%.

Q: What about construction as a sector, have you changed your views at all?

A: What has happened in Indian infrastructure? China added 1,10,000 megawatt of power last year, we added 8,500 megawatt.

This is the situation of the order book of our construction companies. When I think, the investment needed in infrastructure today is not 10% of what I think we will eventually have annually, after 4-5 years. I have retained my investments in Nagarjuna and in Punj Lloyd. I am bullish on this sector.

Q: You don’t think interest rates or margin concerns will derail growth or earnings visibility for this sector?

A: What has interest got to do with it?

Investment in infrastructure is going to take place, it’s at a very initial stage. There are big entry barriers in this sector. Although one negative aspect of this sector is that it is very capital intensive. But there are big entry barriers in terms of qualification, project management skills and I think there is going to be very good growth.

Q: What about oil? You said that refining margins are at an all-time high. How do you see crude panning out because the refining marketing companies are still laggards - HP, BP, IOC, all of them?

A: That is because of the subsidy policy of the Government of India. I personally, on oil price, I feel the range is between USD 50-70. I think ultimately price will be closer to USD 50 than to USD 70/bbl

Q: You have any investments in the oil sector?

A: None.

Q: What about other commodities like metals? I believe you turned quite bullish on Tata Steel after the hammering of stock post Corus?

A: Yes, if Tatas can bring the consolidated margins to 25%, then the kind of profitability they can do it on equity of 800 crore or the kind of profitability (they are) talking, is unbelievable.

In general, I feel over a period of time, commodity valuations will go up. Today, if you see, all commodity stocks they have valued at six times to seven times.

But with the increase in commodity prices, the base prices of commodities - the base valuations of commodities, stocks will go up; and they have done it in Tata Tea. What I feel personally is, as an investor, I will wait because the real efficiencies are going to take three years to kick in and three years is a long period of time.

Q: So you won’t buy now or would you buy, hold and wait - what are you saying?

A: I will wait but I will be alert.

Q: Your call there is on the management or on the steel cycle as such?

A: It’s more on a management than on a cycle.

Q: Are you bullish on the steel cycle even from these levels?

A: I don’t have much of ideas; I have only one investment, which is Bhushan Steel. In general, I think oil prices are going to remain good; they are not going to go down to the levels which people talk of.

Q: As an investor, have you ever taken a big contrarian kind of call? Or do you just identify growth businesses and stay with them for a long time? Sometimes do you think that nobody likes this sector? I think eventually value will emerge; it’s a good time to buy in and wait - have you ever approached investing like that?

A: I don’t know that. I think my whole call in 2001-2002 was a very contrarian call; most people were bullish.

The dogmatic emphatic bullishness that I have would be India and equity market itself is a contrarian call because I don’t think many people share it really and genuinely.

When markets are up, they all say - no, India is going to boom. But the moment there is weakness; everybody is out with a sword.

I don’t think in terms of contrarian or non-contrarian. If I think the stock has got prospects and the valuations are attractive, I will buy.

When I bought Praj, it was very difficult decision because in January of 2003 the price was Rs 10; I bought the stock at Rs 100 in December 2003. So the stock had appreciated 10 times in a period of one year before I bought the stock.

So, I don’t know; stock appreciated 10 times is a vast appreciation and I bought after that. So I am not buying anything to be different.I am only buying it if in my thinking, the earnings will grow and valuations are reasonable.

Q: Do you sometimes fear that your vision or investing wisdom might be clouded by your innate bullishness that you may have failed to spot some danger signs when they are coming up?

A: I am not an innate bull. I have made some of the biggest money in my life by being a bear, right?

Q: But that’s pre-2000 right?

A: Yes. But the qualities I have as a human have not changed after ‘pre-2000’; this is the same Rakesh Jhunjhunwala.

Q: In this whole bull run, from the mistakes that you have made in investing, have you learnt a lot or have you approached investing differently from the few stocks, which have not quite worked the way you thought they would have worked out?

A: I think what I have learnt in the last four years is more than what I have learnt in the previous 43, because whatever has happened in the last four years, has led me to a lot of introspection. I have realized that some of the worst mistakes I have made, (are) in the best of the times.

Q: Give us a couple of examples.

A: In the sense, that god has been kind; my portfolio has really appreciated in the last four years. Sometimes that could lead me to extremely high commitments or try and feel that whatever I have done is right or that why should I review what I am doing? But, in fact, I feel I have now become more careful and more alert than ever.

Q: Are you saying that at some points your arrogance has crept in? You think you are bigger than the market.

A: No, no. I feel I am alert, but that should not creep in.

Q: But has it crept in?

A: Never. The first thing I learnt from Mr. Radhakrishna Damani from whom I learnt so much, that the market is supreme. So we never approach the market with the thinking that what we are thinking is right. When we go there at 10 o’clock, what the screen is doing is right. But the biggest lesson I have learnt also, is that I should approach things without prejudice.

Q: Is it difficult to do? Easier said than done.

A: I think it is easier said than done. Also, what happens, that sometimes if you have been right, you tend to be dismissive. Not tend to be dismissive of the market, but tend to be dismissive about some ideas which you have.

Maybe I was dismissive of real estate 15 months ago, right? That no, I don’t want to invest in this sector. I think I should have paid greater attention. But I console myself with the fact that this quest to learn as an investor is a journey, not a destination.

Q: Has it happened in the last four years that sometimes you have closed your mind to an opportunity too early and have missed out on an opportunity?

A: That has happened and it happens all the time. In fact, in the technology boom - because I am not computer savvy myself, I never understood what software was, I never made the attempt to understand what it is; because I only understood in 1997-1998.

Q: You were telling us about some of the other lessons, what else it taught you?

A: The other lesson is that do not expect that you will have this kind of return constantly. Some of the worst mistakes are made when you get an abnormal return and then you start feeling that you must take steps so that this return can be replicated. We must realize that these returns have arisen also because of external circumstances, which may not be prevalent today.

And therefore, all of the investors must realize that returns in Indian equity are now going to dilute. The low hanging fruit has been taken. But still I think returns are going to be better than lot of other asset classes. And if I see the risk profile, I think Indian equity may still offer the best returns over a period of time.

Q: But what you are saying does not gel very well with your prediction that in three-four years, there will be mass hysteria and euphoria in the market - 15% annualize for the next three years would not lead to mass euphoria; do you see a blow out at the end of this run then?

A: I hope we will have better returns on that.

Q: You think it will be little more than 15%? I am not talking about you as an expert investor, but for people who are less sophisticated and more passive in their investing styles?

A: I do not know about them.

Q: How can everybody generate a Praj and a Titan kind of returns every year? You cannot be the benchmark for the average investor?

A: No, but I personally feel that there could be a consolidation in earnings growth this year.

But I think we will have better earnings growth post-2007-2008. I am personally of the opinion that economic growth in India will kick off to double-digit figures; it may take twenty-four months. I see no reason why we should not.

We are a domestic base consumption story; now we got to go in the investment move and these capital investments combined with the consumption, should take us to 10% double-digit growth.

We have very low FDI levels of investment; our saving rates are going up.

Q: Where do you see politics in the midst of all of this; next couple of years that’s one constant refrain that we won’t see too much by way of reform where they are leading upto another general election - does it worry you?

A: No, we talk of reforms; Mr. Chidambaram made a very important observation after the Budget. He said my growth in tax collections budgeted this year, is more than what my tax collections have been in five years.

Was it possible India without reforms?

We are coming to GST, Goods and Service Tax; I know in some of the consumer durable companies, companies will save upto one-one percent by GST logistics. So there is going to be infrastructure dividend; there is going to be logistics. So I don’t see there is no reform in India, only maybe the pace is slower than what we desired and as far as politics are concerned, I think it is immaterial.

Look at the way Mayawati has changed; I think it is very important she wants to make an all-inclusive India; means, she wants to carry everybody with her. So ultimately, whether Jayalalitha or Mayawati, it’s not going to make much difference as long as they don’t have communist support. I only wish we have a government in whichthere is no communist support. I don’t think politics is really going to disturb India’s economic story.

Q: What is your expectation for the next three quarters? Would you be surprised if the Index broke 12,000 on the way down?

A: Nothing in the market ever surprises me.

Q: Are you expecting it to happen?

A: I cannot say that it will not happen. It could break those levels, but in the absence of earnings. Damage to earnings growth - I don’t think it’s going to retain that loss; it will bounce back. You went to 8500 levels and you bounce back. So I feel, it could break. But if there is no earnings damage, I think it will bounce back with vengeance.

Q: What could break it then - some liquidity contraction, global even; what is the potential risk to this market, which can break it below those supports?

A: Anything can happen, maybe fears about worldwide economic growth abrupt appreciationof the rupee, maybe some political event in India; lot of things would kick it up. The biggest protection I think the market is having against a big fall is that people are not going in for extreme commitments. You are not seeing that kind of commitment in the market, which we saw in 2005.

Q: You don’t find the futures market terribly overbought or leveraged right now?

A: Not at all; when Reliance was at Rs 700, it had got 2 crore shares outstanding. At Rs 1600, it has got 60 lakh shares outstanding. In a market with this kind of market cap, what is the futures commitment of Rs 30,000 crore?

I don’t look at the Index and don’t look at the options; I only look at the plain stock futures.

I don’t think in the cash markets, there is any extreme commitment, because there is no extreme belief itself; nobody is telling me that sell your wife’s bangles and buy stocks.

So you have this big mighty falls and whatever falls we have had in the last three days, in two days the FIIs have sold 3100 crore of Index futures and I think they are going to sell another 1000-1500 crore today also. So there has been substantial amount of hedging and short selling also.

Q: Would you be surprised if the Index went on to break 16,000 this year?

A: It’s a tall order, but I won’t rule it out.

Q: What is your expectation - nothing can be ruled out in a market?

A: I have no expectations. I have an investment. I am confident about the economic growth in India and about the profit growth in those companies. I think valuations in India have not peaked. If my company is constantly growing profit, their size grows, then PEs will grow.So Indian PEs will grow because of size and constant growth in profit.

It is that feeling then; I am retaining my investments and I have absolute confidence there. Not that I don’t have right to change my opinion; I can always change my opinion and I approach the markets everyday with the scare. I also don’t know what’s going to happen in the markets tomorrow. I know only as much you know and we trade with price there. So I won’t be surprised, I won’t rule out anything.

Q: But are you getting that sense looking at the screen that this year we could form a significantly higher top from what we have formed already?

A: It is difficult this year itself. But I won’t rule it out.

Q: But 2008, you think will be a better trajectory for the markets?

A: I don’t think so; the slow down in the auto industry and the worrying thing is slow down in commercial vehicle industry.

Cars have done well and will do well. Let’s see, it is in very initial stage. If interest rates ease, then demand could shoot back in the commercial vehicle industry.

Q: On balance, you are bullish?

A: I am bullish, absolutely and my commitment reflects.

Q: Both long-term and short-term or short-term skeptical, long-term bullish?

A: Let’s leave the short-term part separate. I have all my wealth in equity and that is the biggest commitment and as of now, I need to retain. I don’t know about tomorrow.